Calculate the Tax

The tax authority has no more authority over math than you do. Errors occur, and tax systems are no different. Calculate your tax liability, either by yourself if the numbers are simple enough, or by hiring a tax accountant or tax accounting firm if your business tax situation is complex. You may be able to reduce back taxes if the calculations are incorrect for example.

In any case, you will want to recover and organize any previous records that may help you establish the tax calculations for the period in question. This includes previously filed tax returns for previous tax years, quarterly tax payment receipts, W-2's, expense receipts, and any relevant tax calculation worksheets.

You may want to calculate your tax liability if the amount of tax does not seem correct. Also, beware scams where people target those who owe tax, selling "offers" of compromise that are in fact not legitimate offers. Too often we receive junk mail disguised to appear official - these envelopes and letterhead often look legitimate even as if they are from the tax agency itself. They design the envelopes this way to try to get you to open the letter.

Contact the IRS and any relevant state jurisdictions, in writing, if you have any questions about returns filed for previous tax years. Be prepared with information such as W-2's, receipts, and tax worksheets which can help you establish the correct amounts of revenue and expenses for that period.

Dealing with back taxes is hard enough. Make sure you have accurate and complete information to calculate your back taxes so that it matches the purported tax liability calculated by the authorities.